ON the back of recent global developments that aim to clamp down on Base Erosion and Profit Shifting (BEPS) practices of some multinationals, as well as the increasing emphasis on tax transparency, there is a need for Singapore to re-position itself for value creation to fuel its economy's growth, a report said.
PwC Singapore on Thursday launched a white paper - Singapore: Sovereignty, Society, Substance, Success - where it made recommendations to reform Singapore's tax system.
Said Chris Woo, tax leader, PwC Singapore: "In light of the changing global tax environment and Singapore's evolving position as a value-creating economy, it is an opportune time to review our current tax policy to solidify our position as an attractive and substantive location of business. This will also help to cater to the growing need for increased government revenue to fund more social and welfare programmes."
Among its suggestions are that Singapore should continue to use tax incentives to attract the industries that will create value for the Singapore economy and society, that companies which are granted a tax incentive in Singapore should be subject to higher standards of self-assessment, to use tax incentives for local enterprises to increase Singapore's tax revenue, to raise additional government revenue to fund social support and welfare programmes, and to have Singapore establish an Asian/Asean tax arbitration hub by building on its position as a commercial judicial centre for Asia.
The report also said Singapore should agree on transfer pricing safe harbour rates with other tax authorities and argued for the Republic to continue to expand its treaty network.
Sanitised versions of the private rulings should be published and issued to taxpayers, said Mr Woo, adding that Singapore can be more appealing for the centralisation of research and development (R&D), and intellectual property management activities.